Follow Us:
Print // Bookmark

Exhibit 2. Whistleblower Program and CFTC Customer Protection Fund

Table of Contents >


To enhance regulatory enforcement, the Dodd-Frank Act established the "Commodity Futures Trading Commission Customer Protection Fund" (the Fund), which mandates that the Commission set aside funds from monetary sanctions to award whistleblowers who voluntarily provide information related to violations of the CEA, as well as provide education initiatives to help customers protect themselves against fraud or other violations of the CEA or Commission regulations.  Corrupt practices and fraud in the securities and commodity businesses now face increased scrutiny with this Act.  Whistleblowers are encouraged to report and assist in preventing any illegal practices affecting the CEA.

Section 748 of the Dodd-Frank Act regarding "Commodity Whistleblower Incentives and Protection," obligates the CFTC to pay an award to eligible whistleblowers who voluntarily provide the Commission with original information about violations of the CEA that lead to the successful enforcement of a covered judicial or administrative action, or any other related action, as defined by the CEA.  The term "covered judicial or administrative action" means any judicial or administrative action brought by the Commission that results in total monetary sanctions exceeding $1,000,000. The term "monetary sanctions" refer to monies that are ordered to be paid, including (1) penalties, disgorgement, restitution and interest; and (2) any monies deposited into a disgorgement fund or other fund pursuant to section 308(b) of the Sarbanes Oxley Act of 2002. An award to a whistleblower cannot be less than 10 percent or more than 30 percent of what has been collected of the monetary sanctions imposed in the Commission action or related actions.

To implement the Dodd-Frank Act, the CFTC issued final regulations that were published in the Federal Register on August 25, 2011. Whistleblowers are eligible for an award based on any judgment after the date of the Dodd-Frank Act, even if such violations occurred prior to the passage of the Dodd-Frank Act. The CFTC has the authority to pay whistleblowers as the final regulations were effective on October 24, 2011.

Operation of Fund in FY 2012

Management of the Whistleblower Program

In FY 2012, the Commission will establish the Whistleblower Office to will perform ministerial functions and determination of preliminary award eligibility, which will involve both factual and legal determinations.  More specifically, the Office will be responsible for:

The Commission anticipates establishing the Whistleblower Award Determination Panel in FY 2012. 

Operation of Fund in FY 2013

CFTC Customer Protection Fund
($ in thousands)
  FY 2011

FY 2012

FY 2013

Budget Authority – Prior Year $18,000 $23,755 $23,155
Budget Authority – New Year 5,755 15,000 12,918
Total Budget Authority $23,755 $38,755 $36,073
Planned Expenditures 0 15,600 15,050
Whistleblower Program Direction 0 1,000 1,050
Whistleblower Enforcement Activities 0 500 750
Whistleblower Awards 0 13,000 12,100
Customer Education Program 0 1,000 1,050
Administrative Overhead 0 100 100
Unobligated Balance 23,755 23,155 21,023 


< Previous Page | Table of Contents | Next Page >